Volkswagen Expects Revenue Growth to Slow This Year — 2nd Update

By Dominic Chopping

Volkswagen expects revenue growth to slow this year as it faces a tough economic backdrop and increasing competition, but a large number of new product launches and more favorable cost trends should provide a tailwind, it said Friday.

The German carmaker forecasts revenue growth of up to 5%, a slower pace than the 15% it reported for 2023, while the operating margin is guided at between 7% and 7.5%, from 7% in the previous year.

Shares fell on the news. At 1514 GMT, shares were down 4.4% at EUR119.84, after falling as much as 6% shortly after the news.

Volkswagen has been working through cost-savings programs as well as a 10-point plan to speed up the process of moving away from combustion-engine vehicles and it said the "clean-up work" has now been completed.

"The main course has been set for the restructuring of the Volkswagen Group. We can build on this in 2024 and have a solid basis for an accelerated ramp-up from 2025," Chief Executive Oliver Blume said.

The company is continuing to invest, particularly in China, in new products, its battery business, and its platforms for both battery-electric vehicles and combustion models. It expects to spend 170 billion euros ($183.71 billion) on these investments over five years from 2025 to 2029.

Its previous five-year plan announced at the beginning of last year set investments at EUR180 billion through 2027. It is due to present further details of the new rolling five-year spending plan later this month.

The auto group reported full-year adjusted operating profit of EUR22.58 billion on group sales revenue of EUR322.28 billion, beating FactSet-provided analysts' forecasts on both metrics.

It reported a dividend of EUR9 for each ordinary share and EUR9.06 for each preferred share, up from EUR8.70 and EUR8.76 respectively in 2022.

Net cash flow from the automotive unit in 2024 is expected to be between EUR4.5 billion and EUR6.5 billion, with net liquidity in the division expected at EUR39 billion to EUR41 billion.

Write to Dominic Chopping at dominic.chopping@wsj.com

(END) Dow Jones Newswires

March 01, 2024 10:46 ET (15:46 GMT)

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